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203K Streamline Rehab Loan

203K Streamline Loan –

Limited Rehab Program Overview

The 203(k) streamline loan program gives borrowers the ability to repairs and improvements either to the home that they currently live in, or that special fixer-upper opportunity, without the extra cost or details as found in the regular 203k. One single loan is used to pay for the (purchase or refinance) and the costs of  repairs or “Non-Structural” renovation and improvements. 

This program is only available to certain lenders, designated by the U.S. Department of Housing and Urban Development (HUD). The FHA 203(k) streamline program has already provided many buyers with the funds necessary to buy their first home, or greatly improve a current home. The FHA 203(k) streamline loan is available to borrowers of all income levels, to homeowners who plan to occupy the house, and for homes with one to four units.

203K Streamline Eligible Borrowers:

• Owner Occupants – Purchase – Refinance
• Investors NOT allowed

Types of 203K Streamline Loans:

• 30 or 15 year fixed rates

Eligible Properties:

• Single family dwellings
• Condominiums (FHA project approval required) 
• Townhomes
• 1-4 Unit Properties (One Unit must be Owner Occupied)  

Eligible Repairs and Improvements:

• Roofs, gutters and downspouts
• HVAC systems (heating, venting and air conditioning)
• Plumbing and electrical
• Minor kitchen and bath remodels
• Flooring: carpet, tile, wood, etc.
• Interior and exterior painting
• New windows and doors
• Weather stripping & insulation
• Improvements for persons with disabilities
• Energy efficient improvements
• Stabilizing or removing lead-based paint
• Decks, patios, porches
• Basement completion and waterproofing
• Septic or well systems
• Purchase of new kitchen appliances or washer / dryer

Repairs Not Permitted

• Landscaping or yard work
• Major remodeling
• Moving a load-bearing wall
• Room additions or add-ons to the home
• Fixing structural damage

Requirements to Perform the Work

• Borrowers can select among licensed contractors.
• The lender will review the contractor’s experience, background and referrals.
• The lender will want a copy of the contractor’s estimate and the agreement between the contractor and borrower.
• Borrowers can also arrange to do some or all of the work under a “self help” arrangement.
• Do-it-yourself projects require providing the lender with documentation supporting the borrower’s knowledge, experience and ability to perform the necessary work.

Disbursement of Payments

• Maximum of two payments to each contractor, including the borrower, providing the borrower works under a “self help” plan.
• No more than a 50% advance is allowed.
• Do-it-yourself allowances do not include labor; only materials costs are allowed.
• Final payment is paid after submission of evidence of payment to sub-contractors / suppliers or other possible lien claimants.

Reasons to Apply For a Loan Below $15,000

• The lender is not required to inspect the completed work.
• The lender is not required to authorize a third party to inspect the completed work.
• A letter from the borrower or copies of contractor receipts will suffice as notice of completion, providing the lender has no reason to determine a third-party inspection is necessary